New Overtime Rules go into Effect Dec. 2016

Obama gives Americans a raise. New rules to take effect in December 2016.

Obama’s DOL changes to exemptions under the Fair Labor Standards Act will probably require employers to reclassify salaried employees and issue notices if employees are reclassified from exempt to non-exempt.

Accounting: documents, folders and calculator on the table

Today employers can classify employees who earn $455.00 per week ($23,660 per year) as exempt from receiving overtime as an administrative, executive, or professional under the FLSA. Although Employers in New York must pay at least $675.00 per week ($35,100 per year) in order to avoid paying overtime for a salaried employee. Also employees earning at least $100,000 per year are exempt from receiving overtime.

Coming December 1, 2016, employers will have to pay their employees more to “put them on salary” and avoid overtime. Employees considered administrative, professional or executive will only be exempt from overtime if they make at least $913.00 per week ($47,476 per year). Obama even gives a raise to highly compensated employee allowing those who make under $134,004 per year to be entitled to overtime. Not leaving future raises to chance, Obama – increases raises for years to come. These pay rate salaried thresholds are set to increase every three years after that, with the first increase taking effect on January 1, 2020.

New York’s Wage Theft Prevention Act (“WTPA”) requires employers to issue employees wage notices -and if they are salaried employees to classify them as exempt under one of the exemptions from overtime. The new DOL regulations on salaried employee overtime – will require employers to reclassify employees – if they do not meet the new requirements.

This may mean a raise for workers who employers seek to avoid paying overtime. On the other hand – employees who are no entitled to overtime may see an increase in wages from working 40 hours or more per week. Or employers can chose to end their employees home after 40 hours of work and give employees more time off. Either way its a win for employees.

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